Are You One Of 40% Of Londoners Who Can't Afford A Decent Living Standard?

Over 40% of Londoners don't have enough income for what the public regards as a "decent standard of living", according to new research.

For a single person to reach the "Minimum Income Standard" in outer London they would need to earn at least £20,600 if they were sharing a flat; if they lived in a rented (lower quartile rent) studio flat it would be £25,691, says the Loughborough University study.

The equivalent for inner London is £21,700 in shared accommodation and £29,633 living in a studio.

Ballooning rent costs is one of the main reasons why 3.5million Londoners are just about managing to get by, and people renting at the cheaper end of the market are particularly hard hit, the report says.

Between April 2014 and April 2016 private rents are estimated to have risen twice as fast in London as elsewhere in Britain (7.2% compared to 3.6%), and much faster for smaller properties towards the cheaper end of the market – these increased by around 15% in London, nearly four times the increase in the rest of the UK.

The Minimum Income Standard figure includes food, shelter and clothing, and items such as being able to buy a child’s birthday present or going for an occasional meal out to maintain friendships and work relationships.

The research shows that compared to the rest of the UK, a minimum budget for a single working-age adult is 56% higher in inner London and 39% higher in outer London. This is mostly influenced by the high costs of renting even the cheapest properties.

High childcare costs mean a couple with two children need 54% more than the rest of the UK if they live in inner London, and 37% more in outer London.

Pensioner couples face 30% higher costs in inner London and 17% higher in outer London compared to the rest of the UK. This is driven by rent and the additional cost of social activities.

Do you earn enough? Trust For London, which funded the report, made a Minimum Income Calculator to show how much money you would need, depending on your own circumstances.

Matt Padley from the Centre for Research in Social Policy at Loughborough University said: "This research is based on asking Londoners to look in detail at what is needed to lead a decent life. The findings can help policymakers explore the impact of particular costs in London. For example, people may say a rent is unaffordable to someone on a particular income but what does that mean? You need to know how much people need, after paying their rent, to afford the other basics of life. This research provides those figures.

"What it clearly shows is that in the capital it costs more to have a minimum decent standard of living – driven largely by higher rents, more expensive childcare and the higher cost of transport. It costs around 20% more for families with children to reach this standard in London, but can increase to over 50% in inner London if families don’t have access to social housing and have to rent privately."

The following table gives a comparison of weekly MIS budgets for urban UK households and London households including rent and childcare: £ April 2016 prices; % difference 2016 and 2014 for comparison

Household type

Weekly budget outside London (UK MIS) £2016

London weekly budget (£)2016

and % difference from UK MIS

Inner London

Outer London

£

%2016

%2014

£

%2016

%2014

Single, working age

£286.53

£447.22

56%

47%

£399.33

39%

35%

Couple, pensioner

£353.21

£459.60

30%

31%

£414.05

17%

18%

Lone parent, one child (aged 0-1)

£593.87

£725.49

22%

25%

£692.83

17%

23%

Couple parents, two children (one aged 2-4; one primary age)

£776.28

£912.85

18%

22%

£935.77

21%

21%

Mubin Haq, from Trust for London, which funded the study, said: "This research shows that four in ten Londoners have less than they need for a decent standard of living. That’s 3.5 million Londoners who are at best just about managing to get by, and at worst, not managing at all. The problem is particularly acute for single working-age Londoners whose costs are around 50% higher than if they lived outside the capital.

"While the National Living Wage provided a welcome boost to incomes, this was outweighed by huge increases in private rents, particularly in properties at the cheapest end of the market. These increased by around 15% over the last two years, about four times the rate outside of London.

"We need a two-pronged approach which increases incomes and tackles costs. On incomes, we need more employers paying a London Living Wage, joining the thousands of accredited employers who already pay it. We need welfare benefits which provide more of a safety net for those who can’t manage. And we need action on costs, especially more genuinely affordable housing that is closely linked to the living wage."